![Brazil Brazil](https://cdn-www.bnamericas.com/img/flags/BRAZIL.jpg)
Brazil regulator classifies Subida da Serra project as transportation pipeline
![Brazil regulator classifies Subida da Serra project as transportation pipeline](https://cdnimg.bnamericas.com/ruVELpIhzEmfuOInUyJIQYpjyBpPUFjtjHJQXyfSzRZjsZwpBCVkgVSXvgsJqdQl.jpg)
Brazil's oil and gas watchdog ANP has ended negotiations with the São Paulo state public services regulatory agency (Arsesp) and gas distributor Comgás over the classification of the Subida da Serra gas pipeline.
Arsesp and Comgás argued the São Paulo project should be classified as a distribution pipeline, but ANP deems it a transportation line.
Thiago Luiz Silva, a lawyer at Vieira Rezende, told BNamericas that there are enough reasons for Arsesp and Comgás to go to court against ANP's decision.
The 473mn-real (US$83.5mn) project will connect Compass Gás e Energia's (Cosan) liquefied natural gas regasification terminal (TRSP) in the port of Santos to the grid of its gas distribution unit Comgás.
The 31.5km pipeline will have the capacity to handle 16Mm3/d (million cubic meters per day) of natural gas.
In 2019, Arsesp approved Comgás’ investment plan, which included the Subida da Serra project. On that occasion, the agency classified the pipeline as part of the distribution grid.
In 2021, amid concerns about verticalization in the sector, the ANP classified the pipeline as a transport pipeline. But the regulatory agency itself later considered changing its mind.
After additional studies, the ANP concluded that classifying the pipeline as a distribution line would raise the unit cost of Brazil’s gas transportation rate by 13%. This is because the pipeline transportation grid regulation includes a limit on revenue, which is apportioned among the system's users. If one user leaves the system, those who remain have to bear the cost.
Comgás currently has a contract for imported gas via Subida da Serra for 2.25MMm3/d of gas, which could rise to 4MMm3/d.
Rogério Manso, CEO of gas transporters association ATGÁS, says that ANP's decision puts the issue on track for a technical analysis.
“The solution cannot be one that compromises the industry's operating principles. It has to be consistent with a model that guarantees that there will be an integrated national transportation grid, not based on isolated solutions,” Manso told BNamericas.
He stressed that a model will have to be sought that preserves the investments made by Compass in the project.
“What matters to us is that the regulations are complied with, guaranteeing legal certainty and long-term investment capacity.”
The controversy over the classifications of the pipeline stems from the division of competencies in Brazil's constitution, which separates jurisdictions for regulating natural gas as follows:
a) All activities upstream of the city gate, including natural gas transmission, LNG terminals, import, export and processing, are governed by federal legislation;
b) All activities downstream of the point of custody transfer (city gate) are considered natural gas distribution activities and are governed by state legislation.
Silva, the Vieira Rezende lawyer, pointed out that the original layout of the Subida da Serra pipeline included a connection to a natural gas processing facility. This, combined with the pipeline's technical characteristics, initially led the ANP to classify it as a transportation line.
However, the layout of the project changed, as the ANP itself later acknowledged, according to Silva.
“In the new configuration, Subida da Serra remains within the geographical limits of the distribution grid and downstream from the city gate of the Comgás concession, without access to the distribution grids of other states or gas transmission pipelines,” said Silva.
“So, although the Subida da Serra pipeline did indeed have the characteristics of a transportation pipeline in its original layout, this is no longer the case with the change in layout.”
As the ANP has not yet issued a resolution establishing the diameter, pressure and length characteristics of a transportation pipeline, Silva believes that the classification of distribution pipeline should be preserved.
Comgás declined to comment on the matter when contacted by BNamericas.
Arsesp did not respond to BNamericas.
Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.
News in: Political Risk & Macro (Brazil)
![The problems with licensing projects in Brazil's Amazon region](https://cdn-www.bnamericas.com/img/sectors/politicalriskmacro_2.jpg)
The problems with licensing projects in Brazil's Amazon region
BNamericas talks to Beto Veríssimo, co-founder of environmental NGO Imazon, about project licensing in the region and their potential impacts.
![Why BNDES's growing influence might hurt the Brazilian economy](https://cdn-www.bnamericas.com/img/sectors/politicalriskmacro_1.jpg)
Why BNDES's growing influence might hurt the Brazilian economy
Bank officials hail the lender's role in the economy, but analysts are not convinced.
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects
Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.
- Project: Integral Hydric System of the Chancay Valley - Lambayeque
- Current stage:
- Updated:
1 day ago
- Project: La Florida Airport in La Serena (Third concession)
- Current stage:
- Updated:
1 day ago
- Project: Colón new prison complex
- Current stage:
- Updated:
1 day ago
- Project: Lo Ruiz tunnel (Renca tunnel)
- Current stage:
- Updated:
1 day ago
- Project: Andrea Jusayu wind farm (ex Cerrito wind farm)
- Current stage:
- Updated:
1 day ago
- Project: Comahue Mining Project
- Current stage:
- Updated:
5 hours ago
- Project: Repowering Service Project for Generators 1, 2 and 3 of the Ing. Carlos Ramírez Ulloa "El Caracol" Hydroelectric Plant
- Current stage:
- Updated:
1 day ago
- Project: Ecuador - Perú transmission line
- Current stage:
- Updated:
1 day ago
- Project: Expansion of supply capacity of the Ica electrical system (ITC Project)
- Current stage:
- Updated:
1 day ago
- Project: Porto Norte Fluminense Thermoelectric Park
- Current stage:
- Updated:
1 day ago
Other companies
Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.
- Company: Echoenergia Participações S.A  (Echoenergia)
-
Echoenergia e Participações SA (Echoenergia) is a Brazilian company dedicated to the development of generation projects from renewable sources. Echoenergia is directly owned by ...
- Company: Concesión Vial de los Llanos S.A.S.  (Concesión Vial de los Llanos)
-
Concesión Vial de los Llanos S.A.S., a Colombian consortium made up of Organización de Ingeniería Internacional S.A., Construcciones El Cóndor S.A., Sarugo y Cia. SCS and Murcia...
- Company: Consejo Nacional de Vialidad  (CONAVI)
-
Consejo Nacional de Vialidad (CONAVI) is an organization of the Costa Rican government responsible for overseeing the planning, administration, financing, control, and maintenan...
- Company: Constructora Hernán Solis S.R. Ltda  (H Solís)
-
Constructora Hernán Solís S.R. Ltda. (H Solís), based in San José de Costa Rica, is a firm founded in 1963 by the Greek entrepreneur Hernán Solís, which is aimed at the construc...
- Company: Autopista del Norte, S.A.C.  (Autopista del Norte)
-
Autopista del Norte S.A.C., a subsidiary of Spanish construction group OHL, is the concessionaire in charge of the construction, operation and maintenance of the Pativilca-Truji...
- Company: Minera Titán S.A. de C.V.  (Minera Titan)
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Ventos de São Vitor 08 Energias Renováveis S.A.  (Ventos de São Vitor 08 Energias Renováveis)
-
The description included in this profile was taken directly from an AI source and has not been edited or modified by BNamericas researchers. However, it may have been automatica...
- Company: Ventos de São Vitor 12 Energias Renováveis S.A.  (Ventos de São Vitor 12 Energias Renováveis)
-
The description included in this profile was taken directly from an AI source and has not been edited or modified by BNamericas researchers. However, it may have been automatica...